In-house lawyers use position to speak up on diversity
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
It was while studying constitutional law at the University of Ottawa in the 1990s that Nassib Abou-Khalil, now chief legal officer at telecoms company Nokia, had a revelation. “It was where I learned for the first time about the right to equality,” he says.
Abou-Khalil grew up in Lebanon — “a country torn by war” — not even imagining that equality rights existed. Learning about them shaped his thinking profoundly, he says: “My desire is to see people who do not have all the odds on their side, who were disadvantaged in some way, get an opportunity in life.”
So the lack of diversity in the legal industry troubles Abou-Khalil, who came out to his Nokia colleagues as LGBT+ in 2019. When he is in a room with his peers, he says, “it is evident that women, people who are ethnically diverse or even, as in my case, LGBT+, are not present in the numbers that they should be”.
The statistics broadly support this, especially for the most senior legal roles. In the UK, according to the Solicitors Regulation Authority, only 35 per cent of law firm partners are female, and the proportion drops to 31 per cent in the largest and best-known firms.
Lawyers from black, Asian and minority ethnic backgrounds account for 16 per cent of all law firm partners, but only 8 per cent in large firms. Some 68 per cent of lawyers at the biggest firms had professional parents. Only 5 per cent of all lawyers declare a disability compared with 14 per cent of the overall working population.
However, chief legal officers are now increasingly paying attention to — and sometimes leading — initiatives to help businesses and the law become more inclusive.
On top of their traditional responsibilities, today’s in-house legal teams often have the brief of ensuring their companies respect local employment and equality laws and conform to requirements by regulators to show action on diversity.
The UK financial watchdog, the Financial Conduct Authority, requires listed companies to report progress towards targets to boost the representation of women and ethnic minorities. Meanwhile, under new rules, companies listed on the Nasdaq stock exchange in the US will be required to publicly disclose board-level diversity statistics and have at least two diverse directors, or explain why they do not.
In addition, there is a growing body of evidence that organisations with a more diverse mix of employees perform better.
As Tom Shropshire, general counsel at drinks company Diageo, puts it: “If I’m not open to getting in the best talent, I’m closing off opportunities to make Diageo better.”
For Gideon Moore, chief legal officer at UK bank NatWest, one priority is to create routes into legal careers for those from lower socio-economic and under-represented ethnic backgrounds.
He hopes to expand on the bank’s in-house trainee programme, established in 2013, which targets aspiring lawyers from disadvantaged backgrounds who missed out on securing a law firm training contract. Comprising half a dozen six-month placements, hosted by different parts of the bank’s legal function, this programme has helped about 30 participants to qualify as lawyers.
Yet internal efforts can achieve only so much, says Moore — at least partly because in-house teams tend to hire from law firms. “If private practice isn’t creating a diverse and inclusive workforce, then the people that we’re able to attract into our own institutions will not be as diverse as we would hope them to be,” he explains.
One way to broaden the talent pool is for in-house legal teams and law firms to collaborate through forums such as the US-based Minority Corporate Counsel Association and UK-based General Counsel for Diversity & Inclusion — an initiative to which the general counsel of more than 125 large companies have signed up.
Diageo’s Shropshire is involved with a GCD&I project to develop a summer internship scheme giving would-be lawyers from under-represented ethnic minority backgrounds a foot in the door of high-profile companies and law firms.
As the former head of Linklaters’ US practice in London, and for some years the firm’s only black partner, Shropshire says that “getting that first company on your résumé” is important. It helps you “move yourself up the ladder”.
To spur greater action, many UK and US legal teams now require the law firms that they use to share their diversity data, and demonstrate how they plan to make improvements. Others are setting targets and threatening penalties such as reductions in fees if law firms fail to hit the numbers.
But, while targets can drive change, they also risk encouraging a culture of merely “doing enough” to avoid criticism, warns Louise Ashley, a senior lecturer at Queen Mary University of London business school, and author of a book, Highly Discriminating, on the shortcomings of current approaches to diversity.
“Companies are apt to say ‘we’re not brilliant at this but neither are we any worse than our peers’,” says Ashley. That can make implementing structural changes to tackle exclusionary practices — such as the culture of long hours — feel less urgent, she adds.
A growing awareness of the daily juggling act performed by working parents coupled with the post-pandemic shift towards flexible working could be bringing change, though.
“If a lawyer says, ‘my child is ill, I need to take the morning off’, then sometimes it’s necessary to say, I’m sorry, [in that case] I need someone else to work on this — but it’s rare,” says Tamara Franks, head of group general counsel operations at Universities Superannuation Scheme, a private pensions provider. As clients, she adds: “We can [choose to] act like human beings.”
For Abou-Khalil, general counsel occupy a unique position of influence. As advisers to their businesses, they speak with credibility, he says, and as buyers of legal services they have spending power to choose the law firms they collaborate with.
This was recently brought home to him when a group of Nokia’s partner law firms asked if their employees could join OUT Leaders, an initiative he developed with Nokia’s LGBT+ employee network to help the advancement and visibility of LGBT+ colleagues.
As in-house counsel, he says, “we have a voice in our organisations that carries”.